San Diego County hires Northrop Grumman to run IT services

San Diego County, pending approval of its board of supervisors, is set to turn over management of the county's IT services to Northrop Grumman Corp.

The seven-year IT outsourcing contract with Northrop Grumman's IT division, based in McLean, Va., would be worth $667 million, said Michael Moore, CIO for San Diego County. The proposed contract also has one five-year option, which would be priced at about $500 million, Moore said.

The initial contract calls for the county to pay Northrop Grumman $93 million annually, plus about $10 million in start-up costs, which will be spread over the life of the project.

The county currently pays Computer Sciences Corp. about $100 million to manage its IT services, under a contract awarded in 1999. CSC officials declined to comment on the loss of the contract.

If the county board approves the proposed contract on Jan. 24, the deal would be signed the next day and services would be phased in over the next year. The first phase would transition help desk services, followed by applications support services, desktop support services, network services and then the takeover of the data center.

Moore, while praising the contract with Northrop Grumman, would not compare it to the CSC contract.

'I won't say better or worse, but it's a great deal,' he said. 'We expected that [the price] could've gone up. But because of competition, and because we were very specific about what we wanted, and because we know we have seven years worth of history, I think we got a great deal for the county.'

The project value had been reported to be in the neighborhood of $800 million or more, figuring a 5 percent increase from the CSC contract, but Moore said negotiations kept the price down.
Northrop Grumman was picked over two other finalists: CSC and IBM Corp.

Northrop Grumman's teammates on the project include SBC Communications Inc. of San Antonio, Texas, EDS Corp. of Plano, Texas, and BearingPoint Inc. of McLean, Va.

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